By Dave Conrad

Connecticut's new CEO told nearly 600 business leaders in Hartford that in solving the state's economic problems, "There is no cavalry"_except us."

Speaking at the Jan. 7 Economic Summit & Outlook 2011, sponsored by CBIA and the MetroHartford Alliance, Governor Dannel Malloy said that the state is facing a crisis situation: a budget deficit of $3.5 billion to $3.7 billion and "no real hope of any other substantial help," such as federal funds or the state's depleted Rainy Day Fund.

"We cannot cut our way out of this deficit"_and we cannot tax our way out of it either." That's why growing the economy and reigniting job creation has to be a big part of the solution, he said.

"Today we have to begin a new relationship"_between the companies who employ so many of our citizens, and state government," said Gov. Malloy. "We need to be clear and plainspoken about our goals"_and you need to be able to count on us. We may sometimes have to put things aside for a few years.

"As of today, the governor's office is open for business and Connecticut is open for business."

He said he will focus on making Connecticut more business-friendly, restoring fiscal responsibility, and reinvesting in Connecticut's infrastructures, from education to transportation. The governor pledged that the budget he proposes to the legislature in February will be "without budget gimmicks. We have to get to the point where the state stands on its own two feet."

Gov. Malloy also intends to improve the state's education and higher education systems and especially wants to make Connecticut's colleges and universities "more agile" so that they can take a larger role in economic development.

He specifically asked business leaders to let his administration know what regulatory policies are hampering their efforts to grow the economy. "I believe in appropriate regulation," he said, "but regulation without impeding business."

The governor has consistently emphasized the importance of growing Connecticut's economy. At his inauguration, he said that although we face a crossroads of crisis and opportunity in the state, our "best days are ahead [if] we reach deep and rally hard."

Fueling the state's crisis, he said, is "an unfriendly employer environment, a lack of educational resources, a deteriorating transportation system, and an enormous budget crisis of historic proportions: all coddled by a habit of political sugarcoating that has passed our problems onto the next generation."

Introducing the governor, Ramona Carlow, vice president of public policy and strategy for AT&T, and chair of CBIA's board of directors, said, "As business leaders and employers, we look forward to working with Governor Malloy to make Connecticut a leader once again in economic growth, job creation, and opportunity for all the people of the state."

Lawmakers Agree: Gov. Malloy to Be Economic 'Activist'

Connecticut's legislative leaders agree on at least two things: the state needs a strong economic recovery to get through its fiscal crisis, and Gov. Malloy is going to be very involved in stoking the state's economic fire.

Appearing together at the Economic Summit & Outlook, Senate President Pro Tem Don Williams (D-Brooklyn), Speaker of the House Chris Donovan (D-Meriden), Senate Minority Leader John McKinney (R-Fairfield), and House Republican Leader Larry Cafero (R-Norwalk) didn't always see eye-to-eye on how Connecticut got into its fiscal mess or how to get out of it.

As the lawmakers move to the budget process, the wide differences in perspective expressed at the conference are likely to become more pronounced. Hopefully, both sides can work toward a solution that will create a smaller, more affordable and efficient state government and a more competitive, business-friendly climate in Connecticut.

According to Sen. Williams, this recession and its aftermath are "a different animal" from what Connecticut has experienced in previous downturns. Coming out of this recession has been more difficult and taken a lot longer. He said there would have to be "significant changes and structural changes" made to put the state "on a path to economic recovery and position it for the future."

McKinney said that "the situation is as dire as Governor Malloy says it is."

He credited the governor for acknowledging a major factor behind the crisis is Connecticut's employer-unfriendly environment. "We must [now] say that we are going to create an environment that will make businesses want to grow and invest here."

Recent economic signs, said Speaker Donovan: including a dip in unemployment and a rise in consumer spending: were encouraging. He said the legislature should work to reduce businesses' energy and healthcare costs in the state "so that employers can hire more people."

Shared sacrifice is a relative term, said Cafero. While businesses have been hit hard by the recession: facing high taxes, dwindling profits, and smaller workforces, he said that the state's public sector "has not made the same sacrifice." He and McKinney said that while the economy has weakened, the size and scope of state government has continued to grow.

All of the leaders agreed that Gov. Malloy would be an "activist" chief executive and that it is time for both sides of the aisle to work together to solve Connecticut's challenges.

Dave Conrad is a writer/editor at CBIA. He can be reached at dave.conrad@cbia.com.

http://www.youtube.com/watch?v=LwHGZLnMHxU